Delta’s Growth in Washington Smells Fishy

Delta announced a big increase in flights in New York and Washington this week, and I’m having trouble figuring out how they’re making this happen. Something doesn’t smell quite right, especially in Washington, but I can’t get a straight answer on this. One thing does seem to be clear. The slot swap would have been better for the consumer.

Delta is adding flights in New York, but that’s not a surprise. It’s the increase at Washington/National that has me perplexed. As we all know by now, Delta and US Airways were trying to arrange a slot swap where Delta would give most of its slots to US Airways at National in exchange for US Airways slots at LaGuardia. That was shot down, and now the airlines are fighting the feds in court for permission. You would think that Delta would stick with the status quo pending the court outcome (even if it is a long way away), but that’s not the case. Delta will be adding 27 daily flights to nine cities from National while only killing off service to one city.

Which cities? Here’s the list:

Destination From National

Daily Frequency Change

Boston

7 -> 12x

Columbus

0 -> 3x

Hartford

0 -> 3x

Huntsville

2x -> 0

Indianapolis

2 -> 3x

Jacksonville

0 -> 3x

Orlando

0 -> 4x

Miami

0 -> 2x

St Louis

0 -> 3x

Tampa

0 -> 2x

All these changes happen on October 31, but where the heck is the net increase of 25 slots coming from each way? Delta is, as usual, being tight-lipped about the whole thing, but I did get spokesperson Trebor Banstetter to say:

Our slot portfolio at [National] includes slots that had been subleased to other airlines and are now available for Delta’s use, which is how we’re able to add the additional flights without making reductions other than [Huntsville].

Hmm, the plot thickens. Now, who would have been leasing a big chunk of slots from Delta? Trebor wouldn’t tell me, but come on. How many options are there? I mean, it has to be US Airways, right? Nobody else has that big of a chunk of slots that it would be able to hand back and still maintain a viable operation. Delta must have had these slots leased out to US Airways on a longer term deal, and now Delta wants them back. That’s very interesting if true. It means that besides not getting the rest of Delta’s slots that it was giving away in the deal, US Airways may have lost even more slots than that.

This gets even more interesting when looking at planned service changes. I tried to see if US Airways was cutting flights, and I found some. US Airways had previously said that it would begin flying from National to Ottawa, Montreal, Tallahassee, and Birmingham in October. I no longer see those anywhere in the schedule. That would account for some of the slots. I find myself wondering where the rest are coming from.

The strange thing is that these flights were announced fairly recently. So either US Airways was counting on the slot swap going through or it was expecting to be able to use the existing leased slots for that purpose. But US Airways isn’t talking about this either. I suppose I’m not surprised. It probably wouldn’t be something that US Airways would want to publicize. Delta’s the one who blew this up into a big announcement.

One thing that does seem clear is that by killing the slot swap, the feds have made things worse for Washington fliers. No low cost carriers are coming in to the market (other than JetBlue via its separate American swap), and instead, Delta is just putting slots on competitive routes.

Delta is not starting service on any routes that are unserved today. These all at least have one nonstop airline and some have two or even three without Delta in the mix. Most of the routes overlap with US Airways. It’s almost as if Delta is now trying to pick a fight. Meanwhile, cities like Tallahassee and Birmingham will continue to only have connections now that US Airways seems to have pulled the flights. Those towns must be really angry.

There’s still a lot more to this story. What is the deal with these leases? Why is Delta now somehow thinking that it’ll be a big player in Washington? What’s the end game? Could this just be a political ploy to add service to key senatorial markets? I haven’t quite figured it out yet. I feel like I haven’t even scratched the surface on this one.

40 Responses to Delta’s Growth in Washington Smells Fishy

Picking a fight on competitive routes is a good thing for consumers. Or perhaps rather, a higher number of consumers. I’d much rather have lower fares on flights to 10 cities than high-fare monopolies on flights to 20 cities. If there isn’t service to some obscure place from DCA, then just go to IAD and deal with the monopoly there.

I can’t imagine that Delta is going to dramatically lower fares on these routes. Some of these already have low cost carrier competition (eg Orlando, Boston). The others have low cost competition from other DC airports, for the most part.

Maybe US was the one who objected to letting the DOT conditions go through and pulled out of the deal, and now DL is punishing them for it. I mean let’s think about it, if you’re DL (largest airline in the world) are you as afraid of a little WN competition in NY. If you’re US (smallest and crappiest legacy carrier) WN in DCA is a little scarier, especially given the history in BWI. So, can’t you see US saying something like “No way, Southwest will eat our lunch.” And then DL does a chicken impersonation, and then US grabs its slots and goes home?

I don’t know about the WN angle, but the numbers would back up your point. The DOT wanted a very high percentage of the DCA slots to be divested, more than the LGA slots. So the restrictions at LGA were maybe more palatable for DL than the DCA ones for US.

Which is actually funny, because the only reason they needed to get approval is that you can’t transfer LGA slots. So without LGA in the equation, this wouldn’t be an issue, yet it’s DCA that probably bogged things down in the end.

It’s entirely possible that this is the case, but Southwest wouldn’t get a ton of slots. They’d come in and probably start Florida, Midway, etc. Those aren’t going to kill US Airways. Still, this could be the case.

CF, I love the Major Kong reference from “Dr. Strangelove”, one of my all time favorite movies. Even if you didn’t mean it, claim credit for it, anyway.

I, too, was fascinated by the Delta press release. While these aren’t “Senatorial” or Gubernatorial markets per se, they certainly have attraction for the government set (Congress & staffers, various bureaucrats, lobbyists, etc), especially the Florida nonstops. I once had to help the staffer of a Kentucky congresswoman who ended up missing her swearing in because of a mechanical in APF. Staffer was absolutely nice as could be, but hopefully the Honorable Representative learned something about proactive scheduling.

Ted, I have no inside scoop, but I suspect you’re right. Delta’s press release says they publish the schedule tomorrow, and I’ll be interested to see what kind of equipment gets used for this new DCA flying.

If DL was leasing slots to US all this time, who sets the lease price? If it’s the airlines then why doesn’t DL and US just lease to each other all these slots in the first place that they have been trying to swap? Couldn’t they just lease the slots for $1 a year and each get what they want? I’m thinking maybe you can only lease a slot so long before having to give it up, anyone know?

As I recall, US Airways leased a decently sized portfolio of DCA slots from Northwest after NW pulled down its DCA mini-hub in 1992 or so. (NW had acquired the DCA slots from Eastern.)

Looking at the contractual documents that Delta and US made available as part of their effort to get the slot-swap approved, it looks like US and NW re-upped their lease agreement in 2004. I can’t immediately tell whether the lease was previously scheduled to expire this fall or if DL took some action to take the slots back, but it looks like at least 13 slots from NW are coming back to DL.

Good stuff. Now, I have to assume that these slots wouldn’t have been included in the swap, right? I mean, why would US Airways want slots it already had access to. I imagine US Airways expected to continue leasing these slots and then get the slots in the swap as well. So it could be even a bigger loss for US Airways than we initially thought. If that’s the case, I wonder if it changes US Airways’ thoughts on giving in the government demands (if they lose the lawsuit). I mean, now it’s a bigger number of slots going away. Then again, LaGuardia is now making some money for them, so they’re in less of a hurry.

There are some slots at National available early or late (which is how JetBlue got its last slot to round out the American deal). I don’t believe there are seat size restrictions, but maybe someone else can correct me.

Again, off-topic, but I tried recently to book frequent flyer award from MIA-LAS on both these carriers. DL wanted 80,000 miles for a first class seat and US had plenty of available seats for 50,000. Time to fly more US and less DL.

I was hoping that the slot swap would have worked out so that Delta could have expanded the size of its cramped terminal at LGA. The single hallway they have now for their 11 gates really isn’t sufficient.

On a related note, does anyone here fly Delta out of LGA regularly? I am always puzzled about Gate 5A, which they use primarily for regional jets. They seem to schedule numerous flights at nearly the same time out of that gate. I know CRJs can be turned around pretty quickly, but not every 10 minutes.

Case in point: today’s schedule had a LGA-RIC flight at 930am, a LGA-PWM flight at 940am, a LGA-TYS flight at 950AM, and LGA-IND flight at 955am–all out of Gate 5A. How is that possible? It looks like most of those flights departed late, but why even schedule them like that to begin with?

This is just a random question that I figured someone on here might have the answer to.

AB, Delta Connection flights use five remote spots along the east edge of the ramp. Buses go planeside from a curb under Gate 5, and the FIDS screens in the terminal simply say “5A” for the gate assignment.

TWA did the same thing for TWE at JFK. One gate but you boarded little buses that drove to the correct plane for your flight. After landing you got on a bus and it drove you to the terminal.

Years ago when I used UA/UAE at SFO you went to one gate in the main terminal and went down stairs/elevator and boarded a bus to the UAE commuter terminal, and once there each ground level gate had a sign with four flights for each gate. So you could have 16 turboprops on the ground and all being worked in a few minutes since ramp agents walked passengers to the correct plane.

I was answering a question for a pilot who posted a link to this article on a message board. If he reads this, then he’ll know not to get his hopes up for a Comair base in DCA. LMAO. We will not even be around in 2011.

I received a DL/KL/AF Newline today and it mentioned their expansion plans including NYC, but it didn’t mention a thing about DCA. You would think they would mention that since it had to be in the planning stage for awhile.

A slot only needs to be used 80% of the time. So on any given day, 20% of slots can be unused. Airlines do this by having slight scheduling variations – for example on one day Flight 99 might leave using slot A at 9am, and the next day Flight 99 leaves at 9.10am using slot B.

What’s more interesting to me is that, if you look at the full DCA schedule for November 2010 v. November 2009, total flights/week are up by a net 432 year-over-year. Granted, it’s possible some of the cuts coming have not yet been announced, but 432 operations (roughly 14-15 slots per day) are essentially coming out of thin air… (no pun intended)